Risk Framework

Real-Time Monitoring and Dynamic Risk Controls

Sigma Money continuously monitors the leverage and collateralization ratios of all the positions, and automated triggers respond to deviations by initiating rebalancing or liquidation, ensuring system-wide stability.

Dynamic Leverage Adjustment

Leverage ratios are actively recalibrated based on market volatility and user behavior, helping maintain equilibrium and reduce systemic exposure.

Rebalancing and Liquidation Mechanisms

Threshold-based rules automatically trigger rebalancing or liquidation events to safeguard the protocol’s solvency and maintain consistent peg integrity.

Reserve Fund and Debt Absorption

Sigma Money Reserve fund strengthens the protocol’s ability to absorb shocks. If undercollateralized positions result in bad debt and Sigma Money Reserve is insufficient, the shortfall is proportionally redistributed among active positions to maintain balance.

Recapitalization Protocol

Should the total collateralization ratio fall below 100%, the protocol suspends new position entries and mobilizes protocol-held assets to restore bnbUSD’s peg and protocol health.